Press Release

PUC 2014-15 Management Audits, Efficiency Investigations Resulted in $28+ Million in Savings for Utilities

Published on 9/17/2015

Filed under: Electric Gas Water and Wastewater Telecommunications Transportation and Safety

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today released a 2014-15 annual report on management audits (MAs) and management efficiency investigations (MEIs) conducted in the past year, noting that PUC recommendations related to improvements in operations, service reliability and safety programs have helped regulated utilities save in excess of $28 million.

The Commission voted 5-0 to make the annual report public.

In a joint statement during today’s meeting, Chairman Gladys M. Brown and Commission Robert F. Powelson highlighted the “important, and often unnoticed, work performed by Commission Staff,” including efforts by the Audits Staff to find efficiencies and savings for utilities in order to ensure that rates are reasonable.

During Fiscal Year 2014-15, the PUC Bureau of Audits released MAs of Metropolitan Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, West Penn Power Company (collectively referred to as FirstEnergy - PA Companies); PECO Energy Company (PECO); and The York Water Company. These audits identified 72 improvement opportunities, with 70 of those opportunities being voluntarily accepted or partially accepted by the companies.

The quantifiable net annual or recurring benefits from implementing the recommendations in the three MA reports were $6.6 to $9.4 million in annual or recurring and $21.4 to $22.3 million in one-time savings.  More specifically, the audit staff found that the FirstEnergy PA Companies could save approximately $1.9 million annually and $19.2 million on a one-time basis by reducing inventory and improving inventory turnover levels.  Additionally, the audit staff estimated that PECO could save up to $5 million annually by reducing overtime and realize a one-time savings or benefit of up to $3.1 million by reducing their inventory levels and achieving higher inventory turnovers.

PUC staff also released MEIs of Columbia Water Company (Columbia) and National Fuel Gas Distribution Company (NFGDC). The MEIs showed that 11 of the 19 total recommendations from prior MAs that were reviewed had been effectively implemented and that the companies also had taken some action on the 8 remaining recommendations. 

A total of 10 follow-up recommendations were made, with the companies accepting or partially accepting all of them. More specific information on each of the original audits and investigations can be found at the Commission’s website.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.

For recent news releases and video of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov. Follow the PUC on Twitter – @PA_PUC for all things utility.  “Like” Pennsylvania Public Utility Commission on Facebook for easy access to information on utility issues.

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Docket No.: D-2015-2500634

Contact:

• Nils Hagen-Frederiksen
  Press Secretary
  717-418-2701
  nhagen-fre@pa.gov